Instructions for Completion of Attachment A: Fiscal … · Web viewAttachment 2: Performance Measures. Designed to document negotiated performance measures. This form should be used

OPERATIONAL SERVICES DIVISION

PURCHASE OF SERVICE ATTACHMENT INSTRUCTIONSFOR HUMAN AND SOCIAL SERVICES

Refresh Date: March 21, 2014

SUMMARY OF ATTACHMENTS

Attachment 1: Program Cover Page. Designed to provide general contractor and program information and create an historical “starting point” for all future contract amendments. This form is required for all human and social services contracts and may also be attached to the Standard Contract Form when amending a contract to document changes to the original contract.

Attachment 2: Performance Measures. Designed to document negotiated performance measures. This form should be used for all human and social services contracts and should also be attached to the Standard Contract Form when amending a contract to document changes to the original contract.

Attachment 3: Fiscal Year Program Budget. Designed to reflect the total annual program costs associated with the fiscal year operation of a program. This form is required for all human and social service contracts where payment is based on the submission of a summary or complete program budget and may also be attached to the Standard Contract Form when amending a contract to document changes to an existing budget.

Attachment 4: Rate Calculation/Maximum Obligation Calculation Page. Designed to calculate a unit rate, document program and invoice offsets, calculate the number of billable and purchased units and develop a maximum obligation. This form is required for all human and social service contracts where the rate is based on the submission of a summary or complete program budget and may also be attached to the Standard Contract Form when amending a contract to document changes to the original contract.

Attachment 5: Non-Reimbursable Cost Program Offset Schedule. Designed to provide information on non-reimbursable costs, the source of private funds used to offset those costs and identify if the non-reimbursable costs are a result of related party transactions. This form is required for all human and social service contracts if non-reimbursable costs appear in the budget. If subsequent amendments result in new non-reimbursable costs or a change to the original Attachment 5, an amended version of the attachment should be attached to the Standard Contract Form when amending a contract.

Attachment 6: Capital Budget. Designed to identify capital expenditures necessary to provide contracted services. This form is required for all human and social services contracts with capital expenses and may also be attached to the Standard Contract Form when amending a contract to document changes.

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ATTACHMENT 1: PROGRAM COVER PAGE

Program Information

Requests general information on the contractor, department, program type (day, residential, etc.) and name, complete program address and contact persons. Much of the information requested is self-explanatory.

Document ID # Twenty digit MMARS contract identification number.UFR Program # Unique identifier (digits or letters) that the contractor and department agree to use

to track this program. Please note: The same identifier must be used on all contracts procuring the program and on the Uniform Financial Statements and Independent Auditor’s Report (UFR) for the same period.

Other Reference Information

Departments may wish to include additional information in this field, such as object code, baseline annualization information for renewals or program specific ready-payment information.

RFR Information Check the appropriate box. Attach the Request for Response (including all applicable attachments) or copies of the COMMBUYS Solicitation (referred to as a “Bid” in COMMBUYS) Header Information and the Contract (referred to as a “Master Blanket Purchase Order” in COMMBUYS) Header Information screen prints containing the titles and Bid and Purchase Order document numbers.

Scope of Services The bidder’s response is part of and must be filed with the contract. If, as a result of the negotiation process, there have been changes to the original bidder’s response, departments may document those changes on the original bidder’s response or may document those changes as a separate attachment filed with the contract. Departments should attach a separately drafted scope of services when there is no RFR response, as in the case of a competitive procurement exception.

Total Anticipated Contract Duration

Anticipated Contract Duration includes the initial contract period and any anticipated options to renew. This is the longest possible period that the contract may run given the limits specified in the RFR. You may customize this entry to accommodate duration language options included in the associated guidance (in the Procurement Information Center) entitled Request for Response/Contract Duration.

Initial Duration Duration of the contract executed. Examples include one year or more than one year (multi-year contract).

Options to Renew Options to renew the contract beyond the initial duration. Departments should enter both the number of options to renew and the duration of each option. (For example, three options to renew for one year each).

Fiscal Terms Departments have the flexibility to develop and negotiate a pricing and payment structure most appropriate to the services being procured. Specific expectations regarding compliance with the pricing limitations, including, but not limited to, restrictions on commercial fees for for-profit contractors, should be described in the RFR and documented in the contract. The standardized budget forms are applicable to the three budget options indicated below that are available to departments to accommodate a variety of pricing approaches. These attachments are required for all new human and social services contracts where payment is based on the submission of a summary or complete program budget. Use of the attachments is optional in the RFR; however, if a department chooses to require the attachments as part of the RFR response, it should indicate which pricing option is required and identify any back-up documentation requirements.

Pricing Options Option 1: This option is available to departments when a detailed or summary budget is unnecessary to establish a price or if the price is already established by another authority. It may be considered by departments under the following circumstances:



Rates have already been established pursuant to another independent rate setting authority, such as the Division of Health Care Finance and Policy or OSD Special Education Pricing.

A full budget is not required. (Note: The federal government requires a budget. Consequently, this option is not available for programs receiving federal funds. Departments requiring additional information on any federal funding requirements may contact OSD.)

Federal dollars are not available to support the purchase of the service. Reasonableness of the proposed price can be evaluated by the purchasing

department based on market rates and a review of historical expenses. Department has pre-determined the price.

Under this option, departments may request that a prospective bidder or contractor submit price and capacity information and check this box. Indicate pricing methodology and any additional price specification information at the bottom of the page. For Chapter 71B approved schools, if there are SSI or other program offsets, the net amount including offsets should be reflected on the Option 1 price line and an explanation included in the box at the bottom of the page or in a separate attachment.Option 2: OSD encourages departments to use this approach that summarizes major categories of expenses (Direct Care Staff Wages, Fringe Benefits & Payroll Taxes; Occupancy; Other Direct Care/Program; Direct Administrative Expenses, Agency Administrative Support Allocation; Commercial Fees; Program Offsets) under the following circumstances: A budget is required due to federal dollars available to support the program. Categorical information is sufficient to evaluate the comprehensiveness of the

services and adequacy of resources to achieve performance measures. Departments can request additional information (required staffing pattern,

staff qualifications, housing requirements, etc.) as needed.

Using this method, departments would request that a prospective bidder submit a summary budget when they respond to the RFR.Under Option 2, only the summary budget lines with a “T’ must be completed. Commercial Fees and program offsets for other revenue or non-reimbursable costs, if any, must also be noted. Check the appropriate methodology and reference any additional price specification information at the bottom of the page.Option 3: Departments should require complete budgets only when deemed necessary. Some situations which might benefit from a complete budget submission include: Program is a new or reconfigured service and detailed cost information is

necessary to determine future price. Departments have a documented need to closely monitor expenditures. Categorical information is insufficient to evaluate the comprehensiveness of

the services and adequacy of resources to achieve performance measures. Special circumstances exist that make Option 1 or Option 2 impossible.

Under Option 3, a complete budget must be submitted. Check the appropriate methodology and reference any additional price specification information at the bottom of the page.



Current Max Obligation

Enter the current year maximum obligation for this program. (If Attachment 4: Rate Calculation/Maximum Obligation Calculation Page was used, see Line 15; if Option 1 used, this figure will be maximum obligation). This may be left blank if the contract does not have a maximum obligation (rate contract).

Unit Rate The unit rate negotiated between the department and the contractor. Enter the figure from line 8 from Attachment 4: Rate Calculation/Maximum Obligation Calculation Page or the negotiated rate agreed to under Option 1, if applicable. Not applicable to cost reimbursement contracts.

Billable Units The number of units to be paid for under the contract. Line 9 from the Attachment 4: Rate Calculation/Maximum Obligation Calculation Page.

Funding Prior Years. List past year(s) funding history (if any). Taken together with the next two lines, this section is intended to show the funding for the program over the life of the contract.

Current Year. List the current year maximum obligation (same as above).

Future Years. List projected funding for each year of a multi-year contract.

Additional Payment or Price Specifications

This section should include any addition payment or price information, such as historical information, price methodology or performance reimbursement that may be relevant.


OPERATIONAL SERVICES DIVISIONATTACHMENT 2: PERFORMANCE MEASURES

Definition of Performance Contracting

Performance contracting is the process of identifying and measuring the results, outcomes or products obtained from a contract through the use of measurable indicators.

Performance contracting re-focuses our attention away from the inputs or methodologies (How many staff are funded in the contract? What curriculum is being used?) towards the change, results or end products achieved by the contractors. (Did individuals get jobs? Are they living in permanent housing? Are children healthier? Was the quality equal or superior to that specified in the contract?) Performance contracting systems measure the impact of the services provided to the Commonwealth either directly or on behalf of citizens in publicly funded programs through the development of measurable indicators. These indicators attempt to go beyond the more traditional ways used by the Commonwealth in evaluating programs, such as cost and numbers of people served, by attempting to measure the changes that occurred as a result of services being delivered.

Clearly defined standards regarding the quality, quantity and timeliness also provide objective data in evaluating contract performance. For all service contracts, contract managers can use performance contracting to improve program performance, identify programs that work and those that do not, direct resources to those models or contractors that produce the desired results, improve service quality by sharing best practices throughout the system and support contract management decisions.

The effective implementation of performance contracting requires us to focus on the following questions:

What is the outcome or change that we are looking for as a result of this contract? How will we measure and evaluate if the result has been achieved? How will contractor performance affect our management decisions?

The Commonwealth has a performance based contracting system. All human and social services contracts should contain quantifiable performance measures, standardized by activity code and reported to each purchasing department on a regular basis as specified in the contract. Attachment 2: Performance Measures should be completed for all contracts as well as for any and all amendments to contract performance.

Form Completion:

Program Outputs: Outputs are the quantity of services or work provided through the contract. Output measures for a service might include the number of participants, the number of vaccinations given, the number of service calls or the number of training sessions conducted.

Program Outcomes: Outcomes are the results or accomplishments that occur (at least partially) because of the service provided through the contract. An outcome may be defined as a measurable change or transformation in a person’s life or the deliverable expected. It may be defined as an increase, decrease or maintenance of effort. An outcome for a job placement program might be the percentage of individuals finding employment; for an immunization program, it might be an increase in the percentage of fully immunized children; for a teenage pregnancy prevention program, it might be a decrease in the percentage of teenagers who become pregnant.


OPERATIONAL SERVICES DIVISIONThe RFR specifications must state the anticipated outcomes or results with as much specificity as possible. For example, an RFR might identify a 50% job placement rate for all participants as the desired outcome; however, a better approach might include qualitative standards such as 50% job placement into jobs that pay at least minimum wage, include full health benefits and are maintained for at least 30 days.

Note: An output is different from an outcome. For example, a teenage pregnancy prevention program might identify the outputs as the number of teenagers seen in clinics, the number of telephone calls to an information hotline or the number of training sessions conducted. The desired outcome from the program would be a reduction in the teenage pregnancy rate. One measure (the output) provides information on the actual quantity of services delivered while the other measure (the outcome) focuses on the result or impact of the service.

Program Efficiency: Efficiency measures generally examine the cost of delivering a service (outputs) or accomplishing the desired result (outcome). Examples might be the cost per participant, cost per job placement, cost per service call or cost per training session. An efficiency measure, when compared to other contractors delivering the same service, makes it possible to begin evaluating whether the Commonwealth is paying a reasonable price for the service.

Program Effectiveness: Effectiveness measures examine whether the outcomes achieved were worthwhile and contained any long term benefit. In other words, effectiveness measures look at the extent to which the program yielded the desired outcomes. Was there a long term impact in the lives of teen parents in terms of improved economic stability, staying in school and obtaining an education, and reducing unintended repeat pregnancies? Were families placed in permanent housing able to remain out of emergency shelters? If the intent of a procurement is to reduce costs over time, was that achieved?

Outputs, outcomes, efficiency and effectiveness measures all provide valuable information that can assist departments in their contract management and decision-making process. Departments are strongly encouraged to incorporate all four types of performance measures into RFRs and contracts whenever possible.

Measure: Departments should articulate precisely how the specific performance measure will be defined, calculated and reported during the contract duration. For example, if the output requires a number, the measure field should specify duplicated or unduplicated count and any other information necessary to ensure that all contractors are reporting the information in the same manner. If the outcome requires the reporting of a percentage, the measure field should define both the numerator and denominator of the calculation.

Goal: Departments may establish performance goals for the duration of the contract or may identify goals on an annual basis (either by year of the contract or by fiscal year) and amend the contract based on experience, available funding, changes in target population or other variables. Departments have three options to consider when identifying goals:

Actual: In order to compile baseline data on which to establish future year performance goals, a department may request that contractors submit actual performance data. In this case, no numerical target will be established and the word “actual” should appear in the appropriate year of the “Goal” section.

Contract Specific: Departments may develop contract specific goals for groups of contracts or for each individual contract to account for unique client needs, geographic consideration,


OPERATIONAL SERVICES DIVISIONfunding levels or other variables that impact on performance. Departments should fill in the numerical target for each specific contract.

Statewide: Departments may develop statewide goals for all contracts providing the same service.

More about Performance Contracting

Expectation of Performance Measures: All procurements are expected to contain quantifiable and clearly defined performance expectations. If the certainty or detail of such specifications is not known or available in the procurement, an RFR must include a specific outline of the anticipated goals or outcomes to be accomplished by the procurement.

In some cases, it may be difficult to identify concrete outcomes or “results” for a service. For example, training and education services might be provided with the goal of disseminating information and modifying people’s behavior, however, it may be difficult or impossible to track participants and determine whether the training helped people to think and act differently. In these cases, the development of or output measures such as the number of people served or the number of training sessions or outcome measures to evaluate the impact of the training effort such as pre/post test scores should be developed. If a department is unable to identify performance outcomes for a specific service type, a meeting with OSD and other departments may be useful to stimulate new ideas and share best practices.

Defining Performance: A Critical Issue: In order for performance measures to be useful, it must be clear to everyone precisely what is being measured and how the measures are calculated. Achieving this degree of clarity between both the procuring department and the contractor is one of the most difficult and challenging aspects of performance contracting. Any ambiguities about what and how performance is being measured should be eliminated before the contract is executed. This will ensure that a contractor understands its responsibility and the data collected will be reliable.

As an example, a performance measure may involve the attainment of employment. However, there are many opinions as to what constitutes a “job.” It is the responsibility of the department to define that term in a way that addresses some of those unique characteristics of a job, such as any requirements concerning the number of hours worked each week, qualifying wage, benefit requirements and job retention requirements that, without being defined, might lead to disagreement between the contractors and the department. If a performance measure requires delivery within a specific timeframe, it would be important to define “working” days or “calendar” days to avoid any confusion. It is also important to define how performance will be calculated if the measure includes percentages. For example, there must be common agreement on how the numerator and denominator will be calculated. If measuring an actual number, it is important to address an issue such as duplicated or unduplicated count.

What are the Characteristics of a “Good” Performance Measure? A good performance measure is:

Easily understood by prospective bidders, departments and the general public. Focused on the results or desired changes and defined with a specific goal or level of

performance expected from the contract. Well-defined and considers both the quantitative (how much?) and the qualitative (how well?)

aspects of a service. Developed by engaging as many stakeholders as possible as early in the process as possible. Developed with a written definition and well-defined calculation on how data will be reported. Realistic in terms of available resources, funding and timelines and recognizes externalities

beyond the control of the system.


OPERATIONAL SERVICES DIVISION Standardized and consistent within a specific service type and coordinated with other

departments whenever possible.

Performance Dates and Deadlines: The RFR should identify “any applicable performance dates, deadlines, schedule of delivery dates” or other time constraints that must be met by the contractor. Depending upon the services being provided, a procuring department will normally specify delivery dates or deadlines for performance. Without specified dates, custom and trade practice will determine the interpretation of this portion of the RFR, and a failure to specify deadlines may result in otherwise avoidable delays.

Unless a contract specifies that “time is of the essence,” all contract performance shall be considered under the concept of reasonable time for performance and contractors will be held to specified performance dates.

Data Collection: When developing performance measures, consideration should be given in advance as to how the data is to be submitted and analyzed. Departments should consider:

How much information can reasonably be requested, submitted and analyzed? Departments should identify a reasonable number of performance measures that are consistent with contractor and department resources. Two or three solid, meaningful outcome measures that address substantive changes as the result of services may provide more information than a large number of outputs that simply provide information on the quantity of services delivered.

How often must the data be reported? Will the reporting be monthly, quarterly, semi-annually, etc.?

How will the information be submitted? Wherever possible, departments should streamline the submission process, using electronic submission of data whenever possible or consolidate the reporting process with an already existing reporting requirement.

Who will receive the information? How will information be shared within the department and with other departments?

How will feedback be provided to the contractor? Each department must establish an on-going, systematic process to provide feedback on contractor performance during the contract year. Departments may develop mechanisms for feedback that are appropriate for the scope of service such as written correspondence, telephone communication or face-to-face meetings.

The RFR may identify a variety of approaches that may be used to evaluate contractor performance, including, but not limited to, the following:

Random sampling Review of reports and files Complaints from department staff Other complaints filed with the department Site visits Survey instruments to measure consumer satisfaction Performance goals identified in the RFR


OPERATIONAL SERVICES DIVISIONUsing Performance Data: Throughout procurement and contract management, performance data may be used in at least three ways:

Evaluation of a Bidder’s Response. Departments are encouraged to consider and evaluate a bidder’s past and current performance in all competitive procurements.

Exercising Options to Renew. Under 801 CMR 21.06(2), departments have the option to establish an initial contract duration with an option to renew the contract for a period of time determined by the department in the RFR. Contractor performance should be a primary consideration in determining whether to renew a contract for an additional period of time or conduct a competitive procurement. Contractor performance should also be a consideration at the time of contract review when decisions are made to increase, decrease or maintain the level of funding.

Sanctions and Contract Terminations. Departments have several options to address contractor non-performance. Initiation of corrective measures, contract reductions or other sanctions may be considered for contractor non-performance. Non-performance should also be an important factor in the decision to terminate a contract. Refer to the Commonwealth Terms and Conditions for Human and Social Services and 801 CMR 21.00 and 808 CMR 1.00 for contract remedies and termination provisions.

Note: Departments must provide documentation in the procurement file that supports a decision to continue contracting with a non-performing contractor.

Performance data may also be useful in recognizing exemplary performance. Departments may introduce monetary incentives for exemplary performance by negotiating performance payments for a level of performance that exceeds the goal contained in the contract. For example, a department may negotiate a price for achieving an outcome, such as placement of ten individuals into competitive jobs, but may also introduce a monetary incentive that provides additional compensation for additional job placements beyond the initial ten. Departments may also consider eliminating or reducing routine reporting requirements for those contractors with consistent exemplary performance. Secretariat or department recognition through a formal process could also be considered. Departments are encouraged to develop their own plan for performance recognition.



ATTACHMENT 3: FISCAL YEAR PROGRAM BUDGET

General Instructions

The budget form is designed to reflect the annual fiscal year operating cost of a total program, not just the portions of a program purchased by the Commonwealth. It has been designed to be used for both new contracts and any subsequent amendments. A budget must be completed for contracts executed under either Option 2 or Option 3. If Option 2 is selected, complete only the "" lines of the budget and the Attachment 4: Rate Calculation/Maximum Obligation Calculation Page. If Option 3 is selected, all relevant budget lines must be completed as well as Attachment 4, Rate Calculation/Maximum Obligation Calculation Page.

Note: Non-reimbursable costs, as defined in 808 CMR 1.05 (state) and OMB Circular A-122 or A-21 (federal), should be listed in the budget, but will be deducted from the total program expenses under program offsets - Line 2b of Attachment 4: Rate Calculation/Maximum Obligation Calculation Page or as described later for cost reimbursement contracts.

Commercial Fees for For-Profit Contractors: The amount of fee that a contractor may retain must be noted, for informational purposes only (even if the amount is zero), on POS Attachment 3, Fiscal Year Program Budget. A commercial fee may not be added into the price (rate) paid by the Commonwealth. Commercial fees may not be negotiated or noted on Cost Reimbursement budgets.

For new contracts: Complete the “current” column only.

For amendments within fiscal years: Complete all three columns, the “current”, the “amended change” and the “new”.

For one year options to renew: Departments have two options for completing this form:

1. Complete all three columns: the “current” (final amounts for current FY), the “amended change” (negotiated increases or decreases for next FY) and the “new” (revised amounts for new FY).

2. Complete just the “new” column only to reflect next FY costs. Under either scenario, the “new” column must be completed.

Please use only position numbers and titles as they appear in the Uniform Financial Statements and Independent Auditor’s Report (UFR) Audit and Preparation Manual. The recommended font size for completion of the program budget attachment is 8.

Completion of the budget form:

Step 1: List all resources specified in the contract that are needed to operate the program. In the first two columns, list the UFR title # and the UFR position title in the order that they appear in the UFR using the exact number and position title.

Step 2: FTE: For each Direct Care/Program Support Staff position listed, enter the required full-time equivalents in the FTE column. Combine all FTEs of the same title on one line.


OPERATIONAL SERVICES DIVISIONStep 3: Amount: For each line listed in the budget, enter the total cost in the

amount column. Calculate the subtotals category and the Program Total box at the bottom of the page. For unit rate contacts, proceed to Attachment 4: Rate Calculation/Maximum Obligation Calculation Page.

Please Note: The following total lines on the budget form contain category total codes:

100 - Total Direct Care/Program Staff 200 - Total Other Direct Care/Program300 - Total Occupancy500 - Total Direct Administrative Exp.

510 is a specific code for the expenses within the 410 & 390 - Other Direct Administrative Expenses line.

These codes are for use by the Executive Office of Health and Human Services’ Enterprise Invoice Management (EIM) system.

Step 4: For Cost Reimbursement contracts only: Fill in all columns as described above. Then enter:

Offsets: Fill in the dollar amount (or 0 if there is none) to be offset from each line in the “offset” column on the budget page. The offset may be a distribution of a grant or other source of funding for general program support or it may be specific to a particular position or component (for example, third party payments or food stamps offsetting the cost of meals). The offset should also include other payers’ program support if this contract is buying only a portion of the available capacity. If the contract is partially or entirely federally funded, the program income provisions of OMB Circular A-110 require certain income received in the program to be used to offset allowable costs on which the federal share of the program costs are based. Identify the source(s) and the amount(s) of any anticipated program income used to offset the federal share of allowable costs as defined by OMB Circular A-110. Interest earned on advances of federal funds (ready payments) is not program income.

Carefully review the budget to determine if any costs are non-reimbursable under state regulation (808 CMR 1.05). If a program is partially or entirely federally funded, federal OMB Circular A-122 or A-21 (if the contractor is a college or university) must be reviewed as well. Any non-reimbursable portion of any line must be offset with private (non-Commonwealth) funds. The subtotal of offsets specifically for all non-reimbursable expenses must be entered in Line A at the bottom of the budget page. Any such non-reimbursable costs must be itemized on a separate schedule and the contractor must identify private (non-Commonwealth) sources of revenue to pay for such expenses. Departments must use Attachment 5: Non-Reimbursable Cost Program Offset Schedule or may develop a comparable separate form if needed. Please consult with OSD prior to issuance of an alternate attachment.


OPERATIONAL SERVICES DIVISION Source: Cite the source of offset for each line. Non-reimbursable costs

must be offset with funds from non-Commonwealth sources only.

Reimbursable Costs: Subtract each offset from the corresponding number in the “Amount” column and enter the result in the “Reimbursable Cost” column. Enter subtotals and totals where required. The reimbursable cost amounts become the cost reimbursement line item budget against which monthly expenditure reports and any required amendments will be filed.

Note: Commercial fees may not be negotiated or noted on Cost Reimbursement budgets.


OPERATIONAL SERVICES DIVISIONATTACHMENT 4:

RATE CALCULATION/MAXIMUM OBLIGATION CALCULATION PAGE


Attachment 4: Rate Calculation/Maximum Obligation Calculation Page is designed to calculate a unit rate, to document program and invoice offsets, to document the number of billable and purchased units of service and to develop a yearly maximum obligation. Often the annual program maximum obligation is less than the total program cost. In these cases, the total annual budget will be adjusted through the use of offsets or though other sources of revenue (from other purchasers of the program’s capacity, fundraising, etc.). Certain departments may require a modified version of this page for certain contracts. Please check and verify that you are using the correct format.

Calculate a Unit Rate

Line 1: Enter the program total from the bottom of the budget page.

Line 2: 2a: Program Offsets: Identify the source(s) and the amount(s) of any anticipated program offsets to cover reimbursable program costs only. Program offsets are supports which benefit the entire program and are available to the program regardless of which clients are in the program and who is purchasing the program. Examples of program offsets include, but are not limited to, client resources, third party payments, United Way funding, utilization of public facilities or state employees, donated commodities and services if identified in the budget, voluntary unrestricted contractor contribution and commercial income. If the contract is partially or entirely federally funded, program income provisions of OMB Circular A-110 require certain income received in the program to be used to offset allowable costs. Identify the source(s) and amount(s) of any anticipated program income used to offset the federal share of allowable costs. Interest earned on federal funds (ready payments) is not program income.

The amount of offset to cover all non-reimbursable expenses in the budget must be listed separately on Line 2b. Also, be sure to consider whether an offset is more appropriately classified as an invoice offset (see below).

Note: For programs which serve a stable client population, the department may permit client-specific revenues (such as SSI and food stamps) to be treated as program offsets rather than invoice offsets. Check with the department.

2b: Offsets for Non-Reimbursable Costs: Carefully review the budget to determine if any listed costs are not reimbursable under state regulation 808 CMR 1.05. If the contract is partially or entirely federally funded, OMB Circular A-122 (or A-21 if the contractor is a college or university) must also be reviewed to determine if there are any additional federal non-reimbursable costs. The total amount of non-reimbursable costs contained in the program budget and corresponding offset from private sources must be entered on Line 2b. In addition, Attachment 5: Non-Reimbursable Cost Program Offset Schedule or a comparable form developed by departments must be completed and attached. Please consult with OSD prior to issuance of an alternate form. If there are no non-reimbursable costs, enter $0 on Line 2b. Complete the Attachment 5: Non-Reimbursable Cost Program Offset Schedule only if there are non-reimbursable program costs and attach to the budget.


OPERATIONAL SERVICES DIVISIONSubtotal: Enter the sum of Lines 2a and 2b.

Line 3: Net Adjusted Program Costs: Subtract the total of Line 2 from Line 1.Line 4: Total Program Capacity: Enter the operating capacity of the entire program.Line 5: Share of Total Capacity Purchased by Contract: Identify the number of units

and the percentage (before adjustment for utilization) of the program operating capacity stated on Line 4 to be purchased by this contract. For example, if the department will be purchasing 5 beds of a 10 bed program for the entire year, the number of units would be calculated: 5 beds x 365 days = 1825 bed-days) and the percentage would be 1825/3650 = 50%.

Line 6: Negotiated Utilization Factor, if any: Based on historical and anticipated utilization, departments may identify a utilization factor.

Line 7: Adjusted Capacity Used to Establish Price: Multiply the number on Line 4 (program capacity) times the percentage on Line 6 (utilization factor) and enter.

Line 8: Unit Rate: Divide Line 3 (adjusted program costs) by Line 7 (adjusted capacity) and enter here with the type of unit (hour, bed-day, etc.).

Line 9: Maximum # of Billable Units: Multiply Line 5 (Share of Total Capacity Purchased by Contract) by Line 6 (Utilization Factor). Departments may also include additional language that specifies a contractor’s responsibility to continue providing services should the utilization factor result in a situation where the maximum obligation is reached before the end of the contract period.

Line 10: Other Price Calculation Method: Reference additional information here.

Maximum Obligation Calculation:Line 11: Unit Rate Contracts: Line 8 (Unit Rate) times Line 9 (Maximum Billable Units).

Other Price Calculation Methods: Enter Line 10 amount.Cost Reimbursement: Enter reimbursable cost total from program budget.

Line 12: Invoice Offset: Enter the source and amount of revenues from other payers for clients being served under this contract that serve as an offset via the invoicing process. Client specific revenues, such as client SSI or food stamp contributions, sliding fee collections and third party partial payments are treated as invoice offsets because they reduce the amount of the Commonwealth’s financial obligation for services to those specific clients. Do not re-enter any amount included in Line 2 (program offsets).Subtotal: Add the amounts in Line 12 and enter here.

Line 13: Program Maximum Obligation: Line 11 minus Line 12.

Line 14: Capital Budget: Enter the total from POS Attachment 6: Capital Budget, if applicable.

Line 15: Total Maximum Obligation for Program: Sum of Line 13 and Line 14.

For Information Only:Other Revenue Sources: If this contract is not purchasing the total program capacity (as identified in Line 5), enter the source(s) and amount of revenues that will be derived from other purchasers of the program capacity.


OPERATIONAL SERVICES DIVISIONATTACHMENT 5:

NON-REIMBURSABLE COST PROGRAM OFFSET SCHEDULE


Departments may use Attachment 5: Non-Reimbursable Cost Program Offset Schedule to document non-reimbursable program costs or may develop a comparable separate form, if needed. For all program budgets, the rate and/or reimbursable amount shall not include the cost of certain fund-raising, discriminatory benefits, excessive related party costs and any other items deemed “disallowed” by regulation (see 808 CMR 1.05 and OMB Circular A-122 or A-21). Any such non-reimbursable costs must be itemized on this form or on a separate schedule and the contractor must identify private (non-Commonwealth) sources of revenue to pay for such expenses. Note: Please consult with OSD prior to the issuance of an alternate form.

Step 1: Program Component: For each program component listed on the budget that includes non-reimbursable program costs, list the UFR line # and a description of the non-reimbursable cost.

Step 2: State and/or Federal Reg: Enter “S” if the cost is disallowed under state regulation (808 CMR 1.05), “F” if disallowed under federal OMB Circular A-122 (or A-21, if applicable) or “S/F” if both.

Step 3: Non-Reimbursable Cost: Enter the dollar amount of the program budget line amount that is non-reimbursable.

Step 4: Source of Funds for Offset: Enter the source of private funds that will be used to offset the non-reimbursable cost.

Step 5: Related Party: Enter “Yes” if the non-reimbursable cost is due to limitations imposed on related party transactions or “No” if it is non-reimbursable under other provisions.

Step 6: Name of Related Party: If you entered “Yes” in step 5, identify the name of the related party entity for the listed cost.


OPERATIONAL SERVICES DIVISIONATTACHMENT 6: CAPITAL BUDGET


Attachment 6: Capital Budget is designed to document capital expenditures, purchased either by the department or the contractor, that are required to support the delivery of contracted human and social services. Furnishings and equipment (including computer hardware) meeting the definition of a capital item under 808 CMR 1.02, requested by the contractor and approved by the purchasing department, must be documented on this form. The following are not eligible to be procured through this capital budget: capital items defined under 808 CMR 1.02, which includes capital items that are not moveable, an asset or group of assets that are below the contractor’s capitalization level, or items not approved by the department. Items with a useful life of less than one year or with a useful life of more than one year but costing less than the contractor’s capitalization level for each item (or in aggregate) are not capital items and should be expensed. In this context, “in aggregate” means items of the same general type, e.g., office equipment such as chairs, tables and lamps, that are acquired together on a capital budget. In determining whether each item or items in aggregate exceed the contractor’s capitalization level, the acquisition cost should include the cost of any modifications, attachments, accessories, or auxiliary apparatus necessary to make the item or items usable for the intended purpose.

The bidder or contractor should complete the chart for the capital items it is requesting and attest to its current capitalization level at the bottom of the form before submitting to the purchasing department for consideration. Upon approval of the capital items requested by the contractor, the purchasing department must determine whether it or the contractor will procure the items, check the appropriate box on this attachment and proceed accordingly:

For capital items to be purchased by the contractor: The department will advise the contractor to proceed with the procurement of approved items in accordance with OSD policy and 808 CMR 1.00. The contractor shall acquire capital items through the solicitation of bids and proposals, consistent with generally accepted accounting principles. Contractors eligible to participate in the POS State Purchase Program may purchase items directly from statewide contracts without conducting a solicitation. The total amount on the capital budget page must match the capital budget amount (Line 14) on Attachment 4: Rate Calculation/Maximum Obligation Calculation Page (or be included in the maximum obligation on Attachment 1: Program Cover Page if no program budget is used). Title to all capital items purchased by the contractor through this capital budget shall vest with the contractor (with certain restrictions).

For capital items purchased by the department: The department shall procure the approved capital items through the state accounting system according to 801 CMR 21.00 and make arrangements to have the items delivered to the contractor’s site. For capital items needed for human and social service procurements, the department will record the encumbrance under object code M11, Human and Social Services Program Equipment. The capital budget amount will not be included in the contractor’s maximum obligation. Title to all capital items purchased by the Commonwealth through this capital budget and the M11 object code shall vest with the Commonwealth.

Free use of capital items, facilities and other assets must be clearly disclosed on the contractor’s annual financial statements, regardless of whether the department or contractor holds title. Free use expenditures must be reported as non-reimbursable costs in the program budget and on the Uniform Financial Statements and Independent Auditor’s Report (UFR). Capital items are subject to inventory and disposal procedures specified in Attachment 6 and 808 CMR 1.00.


Documents

Instructions for Completion of Attachment A: Fiscal … · Web viewAttachment 2: Performance Measures. Designed to document negotiated performance measures. This form should be used